How do high-status individuals cope with serious career setbacks? "The bigger they are, the harder they fall" may be a familiar saying; yet, "the traditional perspective is that high-status individuals will be in a better position to deal with status loss and perform well afterwards than low-status individuals," begins a new research paper by Jennifer Marr, assistant professor of organizational behavior at Georgia Tech Scheller College of Business.

Her paper then proceeds to call this traditional view into question. Yes, high-status individuals may have "more resources than low-status individuals on which to draw," but they also "experience more self-threat and subsequent difficulty performing well after losing status," concludes her study in the current issue of the Academy of Management Journal.

Although "making their prestigious position a central part of their self bolsters high-status individuals’ self-worth... it also means that they come to depend more than low-status individuals on their status to maintain their positive self-view," explains Marr and her co-author, Stefan Thau, associate professor of organizational behavior at London Business School.

"Consequently, losing status is likely to be more self-threatening for high- than low-status individuals [and they] will experience a more significant decline in the quality of their performance in the immediate aftermath of status loss,” they write in their paper, titled ““Falling from Great (and not So Great) Heights: Initial Status Position Influences Performance after Status Loss.”

Maintaining Performance

Awareness of this is of practical importance, the paper notes, "because work demands do not stop after status loss occurs. People are always in the middle of projects...A football team captain, replaced by a young upstart, must continue performing well in order to stay on the team. Similarly, a junior attorney, taken off a prestigious case, is expected to execute other tasks proficiently, including editing briefs, preparing for court and meeting with clients...Moreover, in some professions (e.g., surgeons, police officers) even brief lapses of performance quality could have disastrous consequences (e.g., medical errors, accidental shootings),"

Marr and Thau derive their findings from three studies, two involving behavioral experiments and one involving salary arbitration in Major League Baseball.

In the baseball study, the professors sought to determine whether higher-status ballplayers were more negatively affected by arbitration losses than those of lesser status. Final-offer arbitrations, which take place annually in February, require the player and the club to submit proposed salaries to an arbitrator who must then decide on one or the other figure, creating a clear win-loss event for the player. In amplification of this effect, the arbitration results are widely published on a number of websites and discussed in the sports media. Thus, if a player loses the arbitration, such a public defeat signals that the player’s contribution is worth less to the team than he estimated

In short, losing arbitration constitutes a status loss.

Striking Out

The authors analyzed the pre-arbitration status and pre- and post-arbitration performance of all 199 non-pitchers who submitted to final-offer arbitration once from 1974, when the practice was initiated, through 2011. Pre-arbitration status was measured as a composite of the number of All-Star Games for which a player was selected and the major awards he won (such as a Golden Glove award or Rookie of the Year). Assessment of performance was based on a combination of players’ on-base percentage and slugging percentage.

In the 58 percent of the arbitrations where players lost, Marr and Thau found that the higher the status of a player, the greater the fall-off in performance the following year. Further, for the lowest-status players in the sample there was little difference in post-arbitration performance (that is, on the two key measures of on-base percentage and slugging average) whether they won the arbitration or lost. But for the highest-status players there was a marked difference in performance, so that arbitration winners in this highest-status group performed about 70% above the sample average during the post-arbitration season, while the performance of arbitration losers was merely average.

The steep decline among the high-status group leads the authors to characterize the finding as "particularly interesting because our sample is a group of professional athletes whose livelihood and future status depends on their performance on the field, and so they should be particularly motivated to play well to regain status."

Behavioral Evidence

To test the findings of this study and minimize the possibility that the results stemmed from something other than status and its loss, the professors carried out two behavioral laboratory experiments involving university students. Both involved small-group projects in which high or low status was assigned randomly to individuals in the groups and loss of status happened arbitrarily, so that the effects of status and its loss could be clearly distinguished from possible extraneous factors

In both experiments, subjects who were assigned a high status position and then lost it performed more poorly on a subsequent word exercise than other participants, including those who lost status after initially being assigned a relatively low standing. The exception was a group of high-status participants who were asked to write about a specific relationship with someone who made them feel respected and worthy, an exercise in what the study’s authors call "self-affirmation." In the words of the paper, "the restored performance quality that high-status individuals experience when they have had an opportunity to self-affirm provides indirect evidence that a relationship between status position and impaired task-performance quality occurs as a consequence of self-threat triggered by status loss."

Lessons Learned

Asked what lessons might be drawn from the paper's findings, Marr names three.

"The first is to acknowledge that even top performers – in fact, especially top performers – are prone to make mistakes and suffer poor performance in the aftermath of status loss, which suggests that this is not the time to be taking significant actions or making important decisions,” she says. “It is prudent to take some time off and restore one's sense of self-worth before returning to work.

"Second, you can reduce the harm from status loss by taking some time to think about a valued relationship and, in general, by recognizing the value of meaningful relationships or aspects of one's life outside of work. These elements can compensate for threats to the self that loss of status can entail. Another way to achieve this may be by looking to change jobs, to find work at another organization where you feel respected.

"Finally, our research investigates the immediate consequences of status loss, but over time individuals find ways to affirm themselves and come back,” she adds. “Steve Jobs was a prime example of that. Maybe we'll see the same thing with A-Rod now that he has a year off courtesy of a Major League Baseball arbitration. He's talking about coming back better than ever, and, who knows, if he's learned a lesson, he just might."